TORONTO, July 27, 2015 /CNW/ – Firm Capital Property Trust (“FCPT” or the “Trust“) (TSXV: FCD.UN) is pleased to announce the purchase of a 70% interest in seven industrial buildings located in Waterloo, Ontario (the “Portfolio“). The acquisition price for 100% of the Portfolio is approximately $43.3 million, excluding transaction costs. The capitalization rate is approximately 7%. The acquisition is expected to close during the third quarter of 2015.
The Portfolio is comprised of seven multi-tenant industrial buildings totaling 510,034 square feet. The Portfolio has in excess of 40 tenants with a weighted average lease term of approximately 4.0 years. The Portfolio is currently 100% occupied.
The entire Portfolio is being financed through the assumption of a $29.0 million first mortgage at a 2.95% interest rate and existing cash resources. 70% of the Portfolio will be acquired by the Trust, while the remaining 30% will be acquired by a private syndicate group.
ACQUISITION IMPACT ON THE TRUST
Pro-forma the Portfolio acquisition, the Trust’s Adjusted Funds From Operations (“AFFO“) payout ratio is anticipated to be below 80% and Debt to Gross Book Value is expected to be approximately 50%. The Trust will increase the size of its current portfolio by approximately 34% to $122 million and will grow to 60 properties.
5% DISTRIBUTION INCREASE IS THIRD INCREASE OR 20% OVERALL INCREASE IN LESS THAN THREE YEARS
As a result of the Portfolio acquisition and overall improved financial performance, the Trust will be increasing its annualized cash distribution by 5% to $0.42 per Trust Unit per annum or $0.035 per Trust Unit per month from $0.40 per Trust Unit per annum or $0.033333 per Trust Unit per month commencing in November, 2015 payable in December, 2015, subject to closing the Portfolio acquisition. This is the Trust’s third distribution increase since its inception in late 2012 and represents total aggregate distribution increases of 20%. We anticipate this increased distribution to result in an AFFO payout ratio of below 85%.
In addition, the Trust announces that it has declared and approved monthly distributions in the amount of $0.033333 per Trust Unit for unitholders of record on October 30, 2015 payable on or about November 16, 2015 and $0.035 per Trust Unit for unitholders of record on November 30, 2015 and December 31, 2015 payable on or about December 15, 2015 and January 15, 2016, respectively, subject to closing the Portfolio acquisition.
ABOUT FIRM CAPITAL PROPERTY TRUST
Firm Capital Property Trust is focused on creating long-term value for Unitholders, through capital preservation and disciplined investing to achieve stable distributable income. In partnership with management and industry leaders, The Trust’s plan is to co-own a diversified property portfolio of multi-residential, flex industrial, net lease convenience retail, and core service provider professional space. In addition to stand alone accretive acquisitions, the Trust will make joint acquisitions with strong financial partners and acquisitions of partial interests from existing ownership groups, in a manner that provides liquidity to those selling owners and professional management for those remaining as partners. Firm Capital Properties Inc., through a structure focused on an alignment of interests with the Trust sources, syndicates and property and asset manages investments on behalf of the Trust.
Further information about the Trust can be found by selecting the Firm Capital Property Trust link at www.firmcapital.com.
FORWARD LOOKING INFORMATION
This press release may contain forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue”, and by discussions of strategies that involve risks and uncertainties. The forward-looking statements are based on certain key expectations and assumptions made by the Trust regarding, among other things, the closing of the acquisition of the Portfolio. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the Trust believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the Trust nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.
SOURCE Firm Capital Property Trust
For further information: Robert McKee, President & Chief Executive Officer, (416) 635-0221; Sandy Poklar, Chief Financial Officer, (416) 635-0221
